Consulting Conflict of Interest? 2

[JAE]

Here's an situation I'd like to hear comments on:

Small consulting firm - one office.

Markets:
Two major areas

1. Structural engineering for buildings (Engineer of Record). Clients are architects who hire some of the structural staff for building design.

2. Structural engineering used in preparing erection and shop drawings for precast concrete suppliers - both structural members (double tees, IT beams, etc.) and architectural panels (Exterior cladding). Clients are precast concrete suppliers who are subs to general contractors who bid on building projects.

The potential conflict:

Engineer A in the firm exclusively works on buildings as EOR for architects and may design a building that requires precast concrete.

Engineer B in the firm exclusively works on the precast elements and may find a situation where they are called up by a precaster to detail out the precast members that Engineer A specified.

So the firm has two clients -
Number 1: the architect and ultimately the building owner.
Number 2: the precaster who is a sub to the general contractor.

Now Engineers A and B are ethical fellows and would always do things the right way, follow the codes, stand by proper designs, etc. But isn't there a potential problem here?

I can't visualize any situation that would have to cause a problem - but serving two masters?

What do you think?

 

[Ashereng]

The best way to deal with any conflict of intrest is to be up front and disclose it to both parties. If both parties are okay with it, then the conflict goes away.

If one of the party decides it is a conflict, then you need to pick one client over the other - in which case, the confict also goes away (along with the revenue unfortunately).

Or, am I being overly simple about this?

"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?

 

[zdas04]

I do work for manufacturers. I do work for end users. Sometimes the best widget for a particular end user is one that I've designed. In my report I start with a disclaimer:

MuleShoe Engineering has a business and financial relationship (which does not include a sales incentive) with _________ and while we feel that the information presented below has not been influenced by that relationship it is up to [the client] to determine if the following is actually sound engineering advice or should simply be taken in the same light as other marketing documentation

This disclaimer has served me well.

David

 

[KENAT]

This kind of situation was not uncommon in the defence world.

We set up 'chinese walls', I think that was the term.

Essentially work one client paid for wasn't allowed to be used on the other clients project.

In practice it was a joke, both sides wanted a container, we based the container on an existing design, so they ended up being very similar. In fact we only had one 'container expert' so he worked both!

KENAT, probably the least qualified checker you'll ever meet...

 

[hokie66]

JAE,

I have participated in projects such as you describe. Years ago, the small design firm I worked for did reinforcing shop drawings as a supplementary earner, sometimes on our own jobs. And another firm did structural steel shop drawings of its own designs, with either the owner or the contractor as client. I think it is actually a benefit to the owner to have the designer intimately involved in the final product, so I see that the potential for a conflict of interest problem is limited. But every case has to be considered on its own merits.

 

[dig1]

JAE,

I don't like these situations, having been an engineer for one of the clients (my former employeer). My former employeer had an in-house engineering staff to handle speciality process items and "basic" engineering (mainly structural) was sub-contracted.

I recently worked on a project where my former employeer had a contract to build a facility for an end user (process facility using the my former employeer's process equipment). Our scope was the entire mill from top of mat foundation up including buildings, piping, tanks/vessels, etc. The end user was responsible for foundations and general site work. This project was in a different country (not North America) and there was only really one large local engineering company. Both my former employeer and the end user hired the same company and the two respective teams from the consultant were supposed to be split with a "fie wall" between them. The fire wall was more like a chain link fence and information passed relatively freely through informal conversations (lunch, etc).

Often our end user would hear about problems on our side even before we knew about them because the two teams would talk and then the end user's team would tell the end user's project manager who would call us demanding solutions to problems we did not even know existed because our engineering team contact was trying to solve before telling us. We were blind sided. Fortunately, after the foundation work was done this went away but the problem did exist.

I understand what Ashereng is saying, but who does the firm represent in the event of a schedule bust, cost extra, back charge, etc? What if it goes to court? I can visualize all sorts of problems. What if engineer B details something wrong and it gets to site incorrect and engineer A has to re-work some other element in the project to accomodate engineer B's mistake? Obviously engineer A has a legitimate EWO to his client but the precaster has a legitmate backcharge to engineer B. Human nature can take over and neither client would be represented; only the interest of the engineering firm to minimize the cost to the engineering firm. I'm not saying this would happen but it is a possibility and for someone who has sat in the client's shoes at different points in my life it would be a concern.

In no way am I trying to say either person in this hypothetical(?)case would act unprofessionally. However, the potential exists for some people to act this way.

Just my 2 cents.

Patrick